Tom Lee says AI money is rotating into AI. He Owns 4.8% of It.

On Monday, Fundstrat's Tom Lee tweeted a chart comparing Ether up 24% in thirty days over the same time frame that the Roundhill Memory ETF plunged by 38%, a 7,200 basis points gap.

He characterized this as confirmation the "AI downstream" trade is gaining strength, where capital is flowing away from AI hardware and toward the digital infrastructure that AI will someday run on. The gap was 55 points four days earlier. It has widened fast.

Performance, not cash moving is what this chart displays

The ratio chart that Lee published divides BlackRock's iShares Ethereum Trust by the memory fund. Increased from 100 to 172 between June 25th and July 21st. Which means those two assets diverged. It does not tell you a single dollar that left a chip stock and came in Ether. Fundstrat provided no fund-flow data to accompany the chart, so it surmises the rotation from relative prices.

It is a narrower comparison than it seems to be too. The DRAM, which started trading on April 2, has only 21 holdings and more than 70% of the fund is made up of Micron (MU), Samsung and SK Hynix. Three companies moving is not the AI hardware trade unwinding.

The person who is making this call is long 5.77 million ETH

Lee is the chairman of BitMine, which owns some 5.77 million Ether, around 4.8% of all in circulation. And that doesn't make the thesis false. What it does mean is that the loudest voice shouting for AI capital to flow into Ethereum has one of the biggest positions in Ether on earth, and directly profits off this call becoming consensus. Worth knowing before you trade on it.

There is real meat beneath his larger point. All the fees in Robinhood Chain are denominated in ETH. BlackRock's BUIDL fund on Ethereum has surpassed $2.6 billion. JPMorgan is moving products onto Ethereum's public rails. If machines are eventually transacting with machines at scale, and the payments have to be settled by some neutral thing, Lee believes that neutral thing is Ethereum.

Memory chips are not the ones in trouble here

The above is where the story gets complicated. Jefferies predicts that contract prices for memory may rebound by roughly 50% this quarter. Some analysts forecast the growth continuing, TrendForce, for instance, expects typical DRAM contract prices to rise 13% to 18% quarter-on-quarter in Q3 while NAND increases are set to be around 10% to 15%, all of which would be driven by demand from AI servers. There is also a US lawsuit alleging that chipmakers conspired to inflate DRAM prices sevenfold. Tight enough that weak pricing power was never the problem.

So while the ETF has slumped 38%, it increasingly looks more like investors taking a breather from an explosive rally rather than throwing in the towel on AI hardware. SanDisk, widely regarded as one of the leading players in flash; Micron and Seagate fell 14%, 5%, and 10% respectively (in a single July session) on glut fears that the pricing data does not support.

There are two things that may happen at once. This could lead to Ether rallying while memory stocks return downward, without one causing the other. What will actually answer it is memory earnings for the weeks to come and Ethereum ETF flows. Lee has something if money continues to flow into ETH products as chip stocks bounce back. This was a month of correlation wearing a thesis hat, if the ETH bid is gone as soon as semis bounce.

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• Hugging Face, the world's largest open-source AI platform, had to use a Chinese AI model to defend against the OpenAI hack.

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